Hubbell Inc. (NYSE:HUBB)

Current Income Tax Expense

The current income tax expense shows considerable fluctuations over the examined periods. It nearly doubled from 51,900 thousand USD in 2018 to 107,000 thousand USD in 2019. Following this peak, there was a decline to 94,200 thousand USD in 2020 and a further decrease to 79,000 thousand USD in 2021. However, in 2022, the current tax provision experienced a significant increase, reaching 168,000 thousand USD, the highest level in the period analyzed.

Deferred Income Tax Expense

The deferred income tax provision demonstrates a notably different trend compared to the current tax expense. It started at 49,000 thousand USD in 2018 and sharply decreased to only 6,100 thousand USD in 2019, followed by further reductions to 3,300 thousand USD in 2020. A slight increase to 9,200 thousand USD occurred in 2021. In 2022, the deferred tax provision turned negative, showing a tax benefit of 27,800 thousand USD, which contrasts starkly with previous years and suggests a reversal of deferred tax liabilities or recognition of deferred tax assets.

Total Income Tax Expense

The total provision for income taxes, combining current and deferred components, follows a more moderate pattern than the individual components. It rose from 100,900 thousand USD in 2018 to a peak of 113,100 thousand USD in 2019. Afterward, the total tax expense declined to 97,500 thousand USD in 2020 and further to 88,200 thousand USD in 2021. In 2022, it increased significantly to 140,200 thousand USD, indicating an overall rise in tax expense despite the deferred tax benefit recorded in the same year.

Summary of Trends

The analysis reveals that the current tax expense fluctuated significantly, with a pronounced increase in the first and last years of the period. The deferred tax expense consistently declined through 2020 before slightly increasing and ultimately becoming a tax benefit in 2022. This shift in deferred taxes in 2022 likely had a mitigating effect on the total tax expense, which nonetheless showed a substantial increase. The data suggests variability in tax planning or timing differences impacting deferred taxes, as well as changes in taxable income influencing current tax expenses.

United States federal statutory income tax rate

The statutory federal income tax rate remained constant over the period at 21%, showing no variation from 2018 to 2022.

State income taxes, net of federal benefit

State income taxes, net of the federal benefit, exhibited a downward trend over the five-year period. Starting at 4.5% in 2018, the rate decreased each year, reaching 2.4% by 2022. This decline indicates a decreasing impact of state taxes relative to federal benefits.

Foreign income taxes

Foreign income taxes consistently reduced the overall tax rate, with negative values throughout the periods. The magnitude of this negative contribution lessened over time, moving from -1.1% in 2018 to -0.2% in 2022, which suggests a diminishing foreign tax benefit or lower foreign income subject to taxation.

Federal R&D Credit

The federal research and development credit contributed a steady negative adjustment to the tax rate, starting at -1.0% in 2018 and peaking at -1.5% in 2020. After 2020, this credit's impact diminished to -0.8% by 2022, indicating a reduction in the tax benefit derived from R&D activities.

TCJA and related

The Tax Cuts and Jobs Act-related adjustments impacted only the earliest period, recording a negative 1.3% effect in 2018. No values were reported thereafter, reflecting that this tax adjustment was relevant primarily in the initial post-legislation period.

Other, net

Other net tax impacts fluctuated over time, starting at a negative 0.5% in 2018, then showing minor changes through 2019 and 2020. A significant increase in the negative adjustment occurred in 2021, with a value of -2.4%, followed by a reduction to -1.1% in 2022. This volatility suggests variability in other tax items influencing the effective rate.

Consolidated effective income tax rate

The consolidated effective income tax rate remained relatively stable around 21.5% from 2018 to 2020, before declining to 19.2% in 2021. In 2022, the rate rose again to 21.3%, closer to the earlier years’ levels. This pattern shows a temporary reduction in the effective tax rate in 2021, possibly due to the unusually high negative impact of other tax components during that year.

Inventories

Inventories exhibited a fluctuating yet generally stable pattern, increasing from 6,200 in 2018 to a peak of 10,200 in 2021 before slightly declining to 9,600 in 2022. This indicates a moderate growth in stock levels with some variability over the period.

Lease Liabilities

Lease liabilities showed a rising trend overall, starting at 24,800 in 2019 and reaching 27,400 in 2022, despite a notable dip to 20,500 in 2021. This suggests increased leasing obligations with some volatility.

Income Tax Credits

Income tax credits increased steadily from 24,500 in 2018 to a peak of 27,800 in 2020, followed by a decline to 22,800 in 2021 and remaining flat in 2022. The decline post-2020 may reflect changes in tax policy or company tax position.

Accrued Liabilities

Accrued liabilities fluctuated, increasing from 35,900 in 2018 to 42,600 in 2020, then dropping to 38,500 in 2021 and back up to 40,800 in 2022. This pattern suggests variability in short-term obligations or timing differences in expenses.

Pension

Pension liabilities decreased consistently from 49,600 in 2018 to 38,900 in 2022, indicating ongoing reductions in pension obligations which may result from plan settlements, contributions, or actuarial adjustments.

Basis Difference in Subsidiary

The data reflects a one-time recorded value of 25,100 in 2021 with no other recorded figures, indicating a specific event or transaction affecting subsidiary accounting in that year.

Post Retirement and Post Employment Benefits

These benefits steadily declined from 6,600 in 2018 to 4,500 in 2022, suggesting a reduction in long-term employee benefit obligations over time.

Stock-Based Compensation

Stock-based compensation expenses decreased markedly from 13,100 in 2018 to 6,900 in 2022, indicating potential changes in equity compensation strategies or lower grant volumes.

Loss Carryforwards

Loss carryforwards decreased consistently from 22,200 in 2018 to 14,200 in 2022, which may imply utilization of tax losses or expiration of carryforward limits.

Capitalized Research Expenditures

Capitalized research expenditures were recorded only in 2022 at 18,400, signaling increased investment in research and development capitalized in that year.

Miscellaneous Other

This category rose from 8,800 in 2018 to 17,000 in 2021, followed by a slight decline to 16,400 in 2022, indicating growth in other miscellaneous assets or liabilities with stabilization toward the end of the period.

Gross Deferred Tax Assets

Gross deferred tax assets grew from 166,900 in 2018 to a peak of 206,100 in 2021 before a slight decline to 199,900 in 2022, signaling a generally increasing potential tax benefit, with minor recent reduction.

Valuation Allowance

The valuation allowance increased in magnitude from -21,800 in 2018 to -34,200 in 2020, then decreased slightly to -32,200 in 2022, reflecting adjustments to expected realizability of deferred tax assets.

Deferred Tax Assets, Net of Valuation Allowance

Net deferred tax assets rose from 145,100 in 2018 to a high of 173,500 in 2021, followed by a decline to 167,700 in 2022, mirroring changes in gross deferred assets and valuation allowances.

Liability on Undistributed Foreign Earnings

This liability improved steadily, reducing from -10,900 in 2018 to -7,000 in 2022, indicating less exposure or reduced liabilities related to foreign earnings.

Goodwill and Intangibles

Goodwill and intangibles showed a consistent decrease from -206,400 in 2018 to -185,000 in 2022, which may be due to impairments, disposals, or amortization.

Right-of-Use Assets

Right-of-use assets, introduced in 2019, fluctuated between -24,200 and -26,100 through 2022 with a low in 2021, generally aligning with the trends in lease liabilities.

Property, Plant, and Equipment

Property, plant, and equipment increased in absolute liability terms (negative values) from -41,400 in 2018 to -57,900 in 2022, indicating growth in capital assets or rising accumulated depreciation.

Deferred Tax Liabilities

Deferred tax liabilities increased from -258,700 in 2018 to a peak of -301,900 in 2020, then decreased to -276,000 in 2022, showing variability in taxable temporary differences.

Net Deferred Tax Asset (Liability)

The net deferred tax asset (liability) displayed a generally negative balance increasing in magnitude from -113,600 in 2018 to -130,200 in 2020, with a subsequent improvement to -108,300 by 2022, indicating fluctuating net deferred tax position.

The financial data reveals changes in non-current tax-related assets and liabilities over a five-year period.

Non-current tax assets (included in Other long-term assets)

These assets show a generally declining trend from 2018 through 2020, dropping from 6,400 thousand US dollars to 5,100 thousand US dollars. After 2020, a modest recovery is observed, with the figure increasing slightly to 5,200 thousand US dollars in 2021 and further to 5,500 thousand US dollars in 2022. Overall, the assets decreased by approximately 14% from 2018 to 2022.

Non-current tax liabilities

The liabilities increased steadily from 120,000 thousand US dollars in 2018 to a peak of 135,300 thousand US dollars in 2020. Subsequently, there is a notable reduction in 2021 to 114,700 thousand US dollars, with a slight further decrease to 113,800 thousand US dollars in 2022. This reflects a downward adjustment in liabilities after 2020, resulting in an overall minor decrease compared to the initial 2018 figure.

In summary, while non-current tax assets experienced a small decline followed by recovery, non-current tax liabilities initially rose significantly before decreasing below their 2018 level. This pattern suggests potential changes in tax-related obligations and recoverable tax positions, possibly influenced by tax policy adjustments or timing differences in tax recognition during the observed period.

The analysis of the financial data from 2018 to 2022 reveals several notable trends and variations in the company's assets, liabilities, shareholders’ equity, and net income, both on a reported and adjusted basis.

Total Assets

Both reported and adjusted total assets show a consistent upward trend over the five-year period. Reported total assets increased from approximately 4.87 billion USD in 2018 to about 5.40 billion USD in 2022. Adjusted total assets follow a very similar pattern, rising slightly from around 4.87 billion USD to approximately 5.40 billion USD. The adjustments appear to lower total assets marginally across all years, but the general growth trajectory remains stable.

Total Liabilities

Reported total liabilities exhibit minor fluctuations, starting at roughly 3.07 billion USD in 2018, dipping to about 2.94 billion USD in 2019, and then fluctuating slightly through to 3.03 billion USD in 2022. Adjusted total liabilities are consistently lower than reported liabilities each year, showing a downward adjustment of approximately 0.12 billion USD to 0.08 billion USD. The adjusted liabilities also show a gentle decreasing trend from around 2.95 billion USD in 2018 to close to 2.92 billion USD in 2022, indicating a slight reduction in obligations.

Shareholders’ Equity

Reported shareholders’ equity grew steadily from about 1.78 billion USD in 2018 to nearly 2.36 billion USD in 2022. Adjusted equity figures are consistently higher than reported values by roughly 100 million USD annually, ascending from approximately 1.89 billion USD to 2.47 billion USD over the period. This persistent premium in adjusted equity suggests that the adjustments positively impact shareholders' value, possibly by recognizing deferred tax assets or other favorable adjustments.

Net Income Attributable to Shareholders

Reported net income shows variability, with an initial increase from 360.2 million USD in 2018 to 400.9 million USD in 2019, a decline to 351.2 million USD in 2020, followed by recovery and a significant rise to 545.9 million USD in 2022. Adjusted net income mirrors this pattern but is generally higher than reported figures in most years, with a notable adjustment in 2018 (409.2 million USD vs. 360.2 million USD) and 2022 (518.1 million USD adjusted vs. 545.9 million USD reported). The adjustments appear to smooth out income fluctuations, with smaller dips and consistent upward movement particularly evident in 2021 and 2022.

Overall, the data reflects steady growth in the company’s asset base and shareholders’ equity, accompanied by relatively stable liabilities when adjusted for deferred tax effects. The net income figures, after adjustment, suggest improved profitability stability over the analyzed period. The adjustments consistently result in lower reported liabilities, higher equity, and generally higher or smoothed net income, highlighting the impact of deferred income tax accounting on the company’s financial position and performance presentation.

Net Profit Margin

The reported net profit margin shows an overall upward trend from 8.04% in 2018 to 11.03% in 2022, with a slight dip in 2020. The adjusted net profit margin follows a similar pattern, increasing from 9.13% in 2018 to 10.47% in 2022, peaking at 9.74% in 2021. This indicates that profitability improved steadily over the period, with adjustments slightly lowering margin estimates in later years compared to reported figures.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios remain identical throughout the period, starting at 0.92 in 2018, decreasing to a low of 0.79 in 2021, and returning to 0.92 in 2022. This pattern suggests a decline in the efficiency of asset utilization through 2020 and 2021, with recovery to the initial efficiency level by 2022.

Financial Leverage

Financial leverage ratios, both reported and adjusted, steadily decrease over the five-year period. Reported leverage falls from 2.74 in 2018 to 2.29 in 2022, while adjusted leverage declines from 2.57 to 2.19. This reduction indicates a consistent deleveraging strategy, reflecting lower reliance on debt financing or improved equity base over time.

Return on Equity (ROE)

Reported ROE fluctuates across the period, declining from 20.23% in 2018 to a low of 16.97% in 2020, then rising substantially to 23.12% in 2022. Adjusted ROE shows a similar trend but remains consistently lower than reported ROE, moving from 21.60% in 2018 to 20.98% in 2022, with the lowest point at 16.11% in 2020. The dip around 2020 coincides with decreased asset turnover and profit margins, while the rebound indicates a strong recovery in shareholder returns.

Return on Assets (ROA)

Reported ROA increases from 7.39% in 2018, peaks at 8.18% in 2019, then decreases to 6.91% in 2020 before recovering to 10.10% in 2022. Adjusted ROA follows a similar but generally higher trajectory during the early years, starting at 8.41% in 2018 and ending at 9.6% in 2022. The lower asset efficiency in 2020 and 2021 is evident, but the considerable improvement in 2022 reflects enhanced profitability and better use of assets.

The reported net income attributable to Hubbell Incorporated demonstrates a fluctuating pattern over the five-year period. Starting at $360.2 million in 2018, it increased to $400.9 million in 2019, followed by a decline to $351.2 million in 2020. The income then rose again to $399.5 million in 2021 and significantly increased to $545.9 million in 2022. This trend suggests a general upward trajectory with a noticeable dip in 2020, likely influenced by specific external or internal factors during that year.

The adjusted net income shows a similar trend but with some differences in magnitude and timing. It began at $409.2 million in 2018, slightly rising to $407.0 million in 2019, then declining to $354.5 million in 2020. Thereafter, it increased to $408.7 million in 2021 and further to $518.1 million in 2022. The adjusted figures consistently exceed the reported figures each year except in 2019 where they are quite close, indicating the adjustments primarily increase net income, likely reflecting the exclusion of certain non-recurring items or tax effects.

The reported net profit margin increased progressively over the period, beginning at 8.04% in 2018 and rising to 11.03% by 2022. This suggests improving profitability efficiency relative to revenue. The margin dipped slightly in 2020 to 8.39% from 8.73% in 2019, mirroring the pattern seen in reported net income, but the margin recovered well in subsequent years.

Adjusted net profit margins also followed an upward trend, from 9.13% in 2018 to 10.47% in 2022. The adjusted margin stayed consistently higher than the reported margin each year, reflecting the impact of the income tax and other adjustments. The margin declined modestly to 8.47% in 2020 from 8.87% in 2019 but recovered to nearly 9.74% in 2021, showing resilience and improved profitability post-adjustments.

Overall, the data reveals that both reported and adjusted net income and their corresponding profit margins experienced a dip in 2020, followed by substantial recovery and growth through 2022. The adjustments related to deferred and annual income tax typically enhance net income and margins, suggesting that the adjustments remove certain one-time or non-operational impacts, providing a clearer view of the company’s operational profitability. The trend suggests improved operational efficiency and profitability, especially in the most recent year, supported by favorable income tax adjustments.

The financial data reveals several key trends related to the total assets and asset turnover ratios over the five-year period from 2018 to 2022.

Total Assets

Reported total assets show a consistent upward trajectory, increasing from approximately 4.87 million USD in 2018 to about 5.40 million USD in 2022. This represents a steady asset growth over the years, with the most notable year-over-year increments observed between 2020 and 2022.

Adjusted total assets follow closely the same pattern as reported total assets, with negligible variances, indicating that adjustments related to income taxes have minimal impact on the asset base. This stability in adjustments suggests consistency and reliability in asset reporting and valuation.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios are identical, indicating the adjustment process does not affect this efficiency metric.

The asset turnover ratio begins at 0.92 in 2018, showing a slight increase to 0.94 in 2019, followed by a sharp decline to 0.82 in 2020 and further down to 0.79 in 2021. This drop signifies a reduction in the company's efficiency in generating revenue from its asset base during those years.

In 2022, the ratio rebounds significantly back to 0.92, returning to the level observed in 2018. This recovery points to improved asset utilization or increased sales relative to assets.

Overall, the data depicts steady growth in asset levels with asset utilization fluctuating notably, particularly a decrease from 2019 to 2021 followed by a recovery in 2022. Adjustments related to deferred and reported income tax have minimal effect on the figures analyzed, emphasizing that changes in asset base and turnover ratios primarily reflect operational performance rather than accounting adjustments.

The analysis of the adjusted financial data over the five-year period reveals several notable trends in the company’s asset base, equity position, and financial leverage.

Total Assets

Both reported and adjusted total assets show a consistent upward trend from 2018 through 2022. The adjusted total assets increased from approximately 4,865.7 million US dollars in 2018 to about 5,397.1 million US dollars in 2022, indicating steady growth in the asset base over the period. The difference between reported and adjusted assets is minimal, suggesting limited impact from deferred income tax adjustments on the overall asset valuation.

Shareholders’ Equity

The adjusted total shareholders’ equity also exhibits a clear positive trend. It rose from approximately 1,894.2 million US dollars in 2018 to 2,469.2 million US dollars in 2022. This increase reflects an improving equity position, surpassing the growth pace of total assets. The adjusted equity values are consistently higher than the reported figures, indicating that deferred income tax adjustments recognized additional equity value not captured in the reported figures.

Financial Leverage

Financial leverage, measured as a ratio, shows a decreasing trend for both reported and adjusted figures. The adjusted financial leverage declined from 2.57 in 2018 to 2.19 in 2022, illustrating a reduction in reliance on debt relative to equity over time. This trend suggests strengthening financial stability and an improving capital structure. The adjusted leverage ratios are slightly lower than the reported ratios throughout, consistent with the higher equity base resulting from adjustments.

Overall, the data indicates consistent asset growth, increasing equity, and decreasing financial leverage, pointing to enhanced financial robustness over the examined period. The adjustments for deferred income taxes generally enhance the equity presentation and modestly reduce leverage metrics, providing a more favorable view of the company’s financial position.

The data reveals several notable trends and patterns in the annual financial performance and position over the period from 2018 to 2022.

Net Income Trends

Reported net income attributable to the company showed a general increase from 2018 through 2022, except for a decline in 2020. The amount rose from 360,200 thousand US dollars in 2018 to 545,900 thousand in 2022, representing significant growth especially in the final year. Adjusted net income followed a similar trajectory but with slightly different magnitudes, beginning at 409,200 thousand US dollars in 2018, dipping in 2020, and then increasing steadily to 518,100 thousand by 2022. This suggests that adjustments primarily impacted the earlier years, but by 2022 the reported and adjusted figures are more aligned.

Shareholders’ Equity Evolution

Reported total shareholders’ equity demonstrated consistent growth across the five years examined. Starting at 1,780,600 thousand US dollars in 2018, it increased to 2,360,900 thousand by the end of 2022. The adjusted shareholders’ equity figures exhibited a similar upward trend but were consistently higher than the reported values each year, which may reflect the inclusion of deferred tax adjustments. This indicates strengthening equity capital over time, providing a solid financial base.

Return on Equity (ROE) Analysis

Reported ROE initially increased slightly from 20.23% in 2018 to 20.59% in 2019 but dropped notably to 16.97% in 2020, likely reflecting the dip in net income that year. Subsequently, it recovered, reaching its peak at 23.12% in 2022. Adjusted ROE also declined from 21.6% in 2018 to 16.11% in 2020, then gradually improved to 20.98% by 2022. Throughout, reported ROE values exceeded adjusted ROE figures in the later years, which might indicate differences in the net income adjustments impacting the efficiency measure.

In summary, the company's profitability experienced a temporary decline in 2020 but improved markedly thereafter. Both reported and adjusted equity values grew steadily, underpinning stronger financial stability. The ROE trends correspond closely with net income fluctuations, reflecting recovery and growth in shareholder returns towards the end of the period.

Net Income Trends

The reported net income attributable to Hubbell Incorporated displayed an overall increasing trend, rising from $360.2 million in 2018 to $545.9 million in 2022, with a slight decline observed in 2020. The adjusted net income followed a similar pattern, increasing from $409.2 million in 2018 to $518.1 million in 2022. Notably, the adjusted figures were consistently higher than the reported numbers, indicating the impact of deferred income tax adjustments.

Total Assets

Reported total assets showed steady growth from $4.87 billion in 2018 to $5.40 billion in 2022. Adjusted total assets mirrored this increase closely, moving from approximately $4.87 billion to $5.40 billion over the same period. The minimal difference between reported and adjusted asset values suggests limited deferred tax impact on asset valuation.

Return on Assets (ROA)

The reported ROA fluctuated with a low of 6.91% in 2020 and reached a peak of 10.1% in 2022, indicating improvements in profitability relative to asset base during the latter years. The adjusted ROA values were consistently higher than reported ROA, ranging from 6.98% to 9.6%, and also exhibited the lowest point in 2020. Both measures reveal a dip in asset profitability during 2020 followed by a recovery and significant improvement by 2022.

Overall Insights

There is a clear pattern of financial recovery and growth following the 2020 low point across net income, total assets, and ROA. The consistent difference between reported and adjusted figures highlights the accounting impact of deferred income tax adjustments, which slightly increase profitability and asset measures. The substantial increase in net income and ROA in 2022 suggests enhanced operational performance or favorable accounting treatments in that year.